How do you measure your transportation demand forecasting against your peers?

1 Define your metrics

The first step to measure your transportation demand forecasting is to define the metrics that matter to you and your stakeholders. These metrics should reflect your objectives, challenges, and opportunities in your transportation network. Forecast accuracy, bias, error, coverage, and value are all common metrics used by transportation managers to evaluate their forecasts. Forecast accuracy measures how close the forecasts are to the actual demand, while forecast bias evaluates how consistently the forecasts overestimate or underestimate the demand. Forecast error looks at how much the forecasts deviate from the actual demand, and forecast coverage assesses how well the forecasts capture the variability and uncertainty of the demand. Lastly, forecast value evaluates how much your forecasts contribute to operational efficiency, cost savings, and customer satisfaction.

2 Collect and analyze your data

The next step is to collect and analyze your data to calculate your metrics and identify your strengths and weaknesses. You need a reliable and consistent data source that captures historical and current demand, as well as any relevant factors that influence it such as seasonality, trends, promotions, events, and disruptions. Additionally, a robust and flexible forecasting method is necessary to handle different types of demand patterns, scenarios, and assumptions. Descriptive statistics can be used to summarize and visualize data and metrics. Diagnostic analytics can explain the causes and effects of forecast errors and biases. Predictive analytics can project future demand and test forecast assumptions. Lastly, prescriptive analytics can optimize forecast outcomes and recommendations.

3 Benchmark your results

The final step is to benchmark your results against your peers and industry standards. This will enable you to evaluate your competitive position, recognize gaps and opportunities, and set achievable objectives. To do this, you can use several sources and methods such as internal benchmarking to compare results across different regions, segments, products, or channels within your organization; external benchmarking to compare your results with other organizations in your industry, sector, or market; best practices benchmarking to compare your results with the best performers or innovators in your field or domain; and a balanced scorecard to compare your results with a comprehensive set of financial and non-financial indicators that reflect your strategic vision and mission. It’s essential to continually measure your transportation demand forecasting against your peers as it’s an ongoing process of learning and improvement. By following these steps, you can gain useful insights into your forecasting performance, identify areas for improvement, and boost your transportation management capabilities.

4 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?